Refinancing opportunities for healthcare workers
- Refinancing benefits for a Melbourne nurse
- Interest rates and equity
- Why salary packaging can help
After the challenges and disruption caused by COVID-19, the silver lining is that interest rates are now at historic lows. It's also a strong property market in Victoria right now, which means you may have more equity in your home than you realise. Both these factors mean it could be the perfect time to give your home loan a health check.
Here’s how one Melbourne nurse refinanced as part of her retirement planning.
Home loan health check
Approaching retirement, Melbourne nurse Ann and her husband knew it was time to check up on their home loan. While seeking a lower interest rate on their investment property loan, they also wanted to review their entire banking set-up.
As BankVic has a branch at their hospital, the pair were able to meet with a lender at there. Thanks to personalised service and a better rate, they refinanced their loan.
Their new banking set-up will allow them to use their penalty and overtime rates to pay off the loan sooner.
“At the moment, you can’t earn much interest on savings, so at least we can reduce our loan interest via an offset account,” Ann says.
“Not everyone understands the shift work aspect of working in health. You get regular penalties that do add up. It’s vital that your lender understands this and doesn’t just look at your base salary.”
Take advantage of low interest rates
Australia is experiencing record low interest rates, and the Reserve Bank of Australia expects them to stay this way until 2024. For homeowners, this means it could be the ideal time to seek out a better deal. Just make sure you consider the fees when deciding whether refinancing is the right move for you – exit fees, establishment fees and ongoing costs may be incurred.
Understand your equity
Checking your property's value may mean you have more equity in your home than you thought! Many lenders, including BankVic, will do the valuation for you as part of a refinancing assessment. BankVic's lending experts can also help you explore options for using your equity to renovate, pay off another outstanding loan, or even consider a new investment.
Use salary packaging to pay down your mortgage
Refinancing to get a lower interest rate is just one way you can pay off your mortgage sooner. As a health care worker, consider taking advantage of salary packaging to pay off your home loan with pre-tax income. The ATO allows up to $9,010 a year to be salary packaged for mortgage repayments (therefore reducing your taxable income by up to $9,010). This will lead to significant tax savings and may help you reduce the term of your home loan.
BankVic is proud to serve Victorians working in health, emergency services and policing.